Web Stock Picker Says SEC Suit Unfounded

Internet stock picker “Tokyo Joe” Park said federal charges that he manipulated stocks and misled investors about his personal trades are baseless.

Park, in his first public comments since the Securities and Exchange Commission filed civil fraud charges against him last week, said Thursday that he routinely sends cautionary e-mails to his 3,600 customers. Park said his clients understand that he owns every stock he recommends and plans to sell his shares quickly.

“I tell them daily that I’ll be sitting on their fat, greedy faces if they jack up the prices without first checking the fundamentals,” Park said, while sitting in front of five computer trading screens and a pastel self-portrait in the office of his Manhattan apartment.

Park said the SEC’s Jan. 5 suit hasn’t hurt his business, with 78 new customers enrolling since the complaint was filed.

SEC enforcement director Richard H. Walker said Park’s disclosures weren’t frequent enough and deceived investors. Park, 50, whose real name is Yun Soo Oh Park, is one of the best-known stock pickers on the Web and the most prominent Internet operator to be charged by the SEC.

Park has a subscription-based e-mail club called Societe Anonyme that charges as much as $200 a month to clients in 18 countries, including Russia, Dubai and New Zealand. He has made about $10 million from fees and investments in the last two years, raising his total assets to about $15 million, he said. He posts as many as 20 messages a day on his TokyoJoe.com Web site, named after a London nightclub he used to frequent.

Park, clad in a white sweatsuit, said his disclosures advise clients to avoid buying a stock right after he recommends it because they will push up its price at a time when he will be selling. He gave Bloomberg News a cautionary Dec. 16 e-mail that he sent to clients. It said: “I will buy before you, I will sell into your greed, and take your money, every single time.”

The SEC, which has been cracking down on questionable Web stock sales for 18 months, accused Park of recommending five securities without telling investors that he owned them and planned to sell after his endorsement. His recommendations led to spikes during which he sold his own shares, the lawsuit alleged.

A legal expert said the SEC’s claim that Park is an investment advisor “is sending shock waves” through other Web stock pickers. These pundits fear that they may have to register with the SEC and be subjected to closer oversight and new restrictions if the agency prevails in the case, Columbia University law professor John Coffee said.

Many of Park’s customers expressed support for him, saying he routinely disclosed his trading plans while urging them to research a stock and not act hastily. Bloomberg News contacted several customers after Park invited his members to comment on his disclosures.

“He is best--I will stand up for him, and his integrity,” Jennifer Gould of New York City wrote in an e-mail.